Don't IRMAA tiers only affect those with very high income? I'm going to keep our MAGI low enough to receive lowest subsidy for ACA, at least that is the plan for now. You won't have to worry about IRMAA tiers for ~8 years, or two years before you start paying for Medicare. For anyone who is paying ...

I-ORP will (usually) solve when using the "no Roth conversions" option. I don't know why it won't solve when one limits Roth conversions to some X% tax bracket ceiling. As the I-ORP documentation notes, "Pick a ceiling that is too low for your income situation and ORP will cough back an infeasible ...

This is a Company 401k plan that allows both traditional and Roth contributions. The 401k contribution limit in 2019 for someone age 50+ is $19,000 + $6,000 = $25,000. This limit applies to the total contributions to traditional and Roth. One may contribute $25K to traditional and $0 to Roth, or $2...

I work for a company that has matching funds for 401 and Roth. Is there a limit i can put into the Roth? People 50 and over can contribute an additional $1,000 (the catch-up contribution did not change) for a total of $7,000. This is from fidelity net benefits, The Internal Revenue Service (IRS) li...

I-ORP will (usually) solve when using the "no Roth conversions" option. I don't know why it won't solve when one limits Roth conversions to some X% tax bracket ceiling. As the I-ORP documentation notes, "Pick a ceiling that is too low for your income situation and ORP will cough back an infeasible m...

Does that hold true even if I've been inaccurately entering my basis for several years? No. But I would think if you had inaccurately entered your basis for several years, all your back doors would be messes up and you would have noticed it right away. That's where that spreadsheet is useful: to se...

Can someone explain further how to get the 2% rebate out of Fidelity? The specific steps. Right now it goes to my wife's Roth IRA which is only complicating our portfolio management, that's the only reason that account is at Fidelity. Thanks! One way: under Manage Money & Payments > Credit Cards, n...

PassiveChoices, welcome to the forum. You have a good plan. See below for slight modifications. To your questions: 1. No, not a problem. 2. Not correct. Rollovers and conversions have no impact on your contribution limit, so you should convert the full $6500 in step 3 of your "should do" list. 3. Pu...

Your allocations are reasonable. Probably not the best - but neither you nor anyone else will know what was "best" until after the fact, so "reasonable" should suffice. Might be worth putting your numbers into Optimal Retirement Planner - Extended Parameter Form to see what it suggests regarding con...

Now, when most people open an account, there simply is no code on the paper--which means that they are not exempt. Depends on how one defines the word "exempt". Taking the dictionary definition , "free or released from some liability or requirement to which others are subject," equating "not applyi...

...they ask that I certify that "I am exempt from Foreign Account Tax Compliance Act reporting." Now, based on my understanding of FATCA, very few U.S. citizens are exempt from FATCA. From Summary of FATCA Reporting for U.S. Taxpayers | Internal Revenue Service : Reporting thresholds vary based on ...

Hi all, First post after several years of osmosis on this site. I have an annual battle with Turbotax to account properly for my backdoor Roth IRA. Assuming that I contribute a nondeductible $5,500 to a TIRA in 2018 and convert it to a Roth in the same year after a gain of $100 (so $5,600 converted...

Am I the only one who finds it hard to wrap their heads around the OP's basic premises:... I had the same thought, but I think the premise is they can do all this and come in in the 24% bracket, not the 32% bracket which of course would be nuts . Perhaps azianbob will provide the results of the mar...

A couple of things: 1. Doesn't matter whether a spouse has earned income or not: as long as the MFJ income fits within IRS boundaries, both spouses may make IRA contributions. 2. You might check the marginal tax rate you save on the entire contribution amount needed to reach the 20% credit, either b...

Is this correct? I might as well use the annual capacity in non-deductible IRA as I wait for my lending club portfolio to run off, right? Am I missing anything here with my thought process? Yes. Yes. No. Well planned! BTW, assume I am in highest federal bracket for the next 20 years. 2nd question -...

Not necessarily. Even though you exceed MAGI the year you turn 63 (or 64), it’s easy to file a successful IRMAA appeal if you expect your income will drop below MAGI the year you will turn 65 due to retirement or another SS life changing event. Look at SSA-44. Correct. Although, "stopped doing Roth...

So if I am understanding correctly, for health insurance, if I retire early (before 65), I should try to keep my AGI under $65,000 until I am 65 so I can still get the ACA credit, and then once I turn 65, keep my AGI under $170,000 so I pay the lowest Medicare premium possible? The spreadsheet you ...

We most likely will do the 19k 401k, some variation of 12k IRAs, and max HSA this year. Didn’t use to max HSA but employer switched providers and now have investment options instead of a crappy 0.5% interest rate. Decision for us is on IRAs - we jump into the 12% bracket with 401k and standard dedu...

...which may be possible but it seems an aggressive default assumption Well said. I'm dealing with a similar issue. If I want to do backdoor Roth, I'll have to move several Rollover IRAs with not immaterial amounts into existing active 401k's. The fewer mouse clicks required for the IRA->401k, the ...

As for the Roth, even with the added $150k, since I am married, we will come in under the $321,450 limit for 24% tax bracket (sadly). I think paying 24% one time.... Your marginal rate may be significantly higher than 24%. NIIT, additional Medicare, etc. may affect you. Consider putting your non-co...

https://www.physicianonfire.com/value-of-backdoor-roth/ He basically states it is worth about 50 bucks a year. That might lead one to believe that over ~20 years it would make ~$1K difference. But if one puts $6K/yr into Roth, earning 7%/yr, after 20 years one would have ~$246K spendable. That same...

Note that we're thinking about effective rate here, and not the future marginal rate, because that's the rate we'd be saving by going the tax-deferred route. The effective rate (i.e., total tax divided by total income) should play no part in your decision. As KlangFool indicated, it's marginal now ...

Thanks for the clarification. Entering W2 data directly into a return would be data entry, not calculated, right? Depends on the software and what is meant by "directly". E.g., the software might want W-2 info entered on a "W-2 screen" from which the software will add "all" W-2 box 1 entries for fo...

I think all of the usual packages have a "form view" mode in which one can input numbers more or less directly. E.g., you might have to enter W-2 numbers into a W-2 form, from which the software carries W-2 box 1 to the 1040.

...when it makes sense to put some or all of one's 401(k) deferrals into the Roth side of the account. When you expect your traditional accounts will have grown to the point that a 4%/yr (or other number of your choice) withdrawal rate in retirement, combined with other "unavoidable" (e.g., pension...

Note that the effective rate, either now or in retirement, is irrelevant. What matters is the marginal tax rate you can save using traditional now, vs. the marginal rate you pay for withdrawals based on those contributions. What is your current marginal tax saving rate on traditional contributions? ...

1. Money in the taxable account is more flexible and useful when we are young. If you are planning to use some money in the short term (e.g., within a few years), that money should be "saved" and not "invested" - does that make sense? Otherwise, consider Investment Order for how you might prioritiz...

In the past, it was AMT all the way, so the net effect was that my state taxes paid were not deductible, but my refund was effectively not taxed (since that is excluded for AMT). And that remains true - it is last year's treatment of your state tax deduction for AMT purposes that determines this ye...

I will forget about the 2017 (they need the money. However, I would like to avoid the penalty for tax year 2018 (if any). The one event that brought me over the PTC threshold was a mandatory stock gain due to a merger in November. I had sent a large check to IRS in December. The way it looks now I ...

Can’t locate irs rules specific to this but it may be they do not spell this out clearly and the strategy is there for the taking for those who understand the rules. See Notice 2014-54 Allows After-Tax 401k Roth Conversions . Again, I’ve looked for this on the board but still have these questions. ...

1. - Anything wrong with dipping into it and funding both my Roth and Spousal Roth right now? 2. - Good idea to use some of the money in the 30k to pay medical expenses (about 2k needed)? We will keep contributing to our HSA fo tax benefits 3. - After the above is completed, can I think of the rest...

I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04. Given that, why are you seeking a Roth IRA instead of a traditional IRA? Or just preemptively conduct a backdoor Roth conversion (assuming there are no tax implications...

It isn't "should I pay tax on that $10k contribution today vs. tomorrow". It's also "what if that $10k grows to $30k tomorrow?" Would I rather pay tax today on $10k at my tax rate, or pay tax tomorrow on $30k at whatever rate might exist when I retire? Depends on the tax rates, not the amounts bein...

are you doing "mega" Roth conversions, meaning not at the level of zero taxes or even the lowest tax bracket. Yes, using a spreadsheet with logic copied from the personal finance toolbox spreadsheet. This accounts for the various IRMAA and ACA cliffs noted previously, plus various other marginal ra...